Treasuries advanced on Friday, led by the short-end, pushing the yield on policy-sensitive two-year notes lower by 10 basis points. Traders added to bets that policymakers will cut rates by a quarter-point on November 7, just two days after the US election. A key gauge of the dollar slumped to its lowest in more than a week.
The job report showed just 12,000 jobs created in October, with the data distorted by severe hurricanes and a major strike and coming in well below the median economist forecast of 100,000. The prior month’s total was revised lower to 223,000 from 254,000.
There was “a lot of noise in this number between the revisions, the strike impact, the hurricane,” Jeffrey Rosenberg, portfolio manager at BlackRock told Bloomberg Television. Looking at the broader tone of the economy, he said the Fed likely cuts next week and in December, and then will “see where the data goes and how restrictive policy is. The labor markets are normalizing” and “the soft landing is still the message.”